Investors think the U.S. economy is at a perfect temperature for stocks: not too hot, not too cold.
The latest evidence came Friday in a jobs report that showed a pickup in hiring last month that could mean more people with paychecks, more spending and higher corporate profits. But the report also showed that wages were stagnant, which cheered investors worried anything pushing up inflation could prompt the Federal Reserve to raise interest rates soon and kill the rally.
All major stock indexes rose sharply. The Dow Jones industrial average closed 208 points higher. The rally started from the open and swept up nearly every kind of stock, small and large, and in almost every industry. All 10 sectors in the Standard and Poor’s 500 index rose.
The good news pushed up the value of the dollar against other major currencies to the highest level in more than four years. U.S. bonds and gold fell as investors fled traditional “safe haven” assets.
U.S. employers added 248,000 jobs in September, beating market expectations of 215,000, the Labor Department reported. The hiring helped drive down the unemployment rate to 5.9 percent, the lowest since July 2008. Hiring in July and August was also stronger than initially estimated.
Still, average hourly wages fell a penny last month, the Labor Department reported. Wages are now up just 2 percent in the past year.
The Dow rose 208.64, or 1.2 percent, to 17,009.69. It was the third 200-point move in a little over a week as markets turn more volatile.
The S&P 500 index climbed 21.73 points, or 1.1 percent, to 1,967.90. The NASDAQ composite rose 45.43 points, or 1 percent, to 4,475.62.
The good news in the U.S. contrasts with troubling signs in other countries. The Chinese economy is slowing; the 18-country eurozone is teetering on another recession. On Thursday, the European Central Bank disappointed investors by not announcing details of more stimulus measures. All major European indexes ended the week sharply lower.
The prospect of a two-speed global economy drove up the value of the U.S. dollar on Friday. The U.S. Dollar Index, which measures the dollar against six other major currencies, surged 1.3 percent. The euro fell 1.2 percent to $1.2515 while the dollar gained 1.2 percent to 109.76 yen.
Investors will get a better sense of how much the improving economy is helping company profits next week when aluminum maker Alcoa kicks off the unofficial start to corporate earnings season.
In stocks making big moves:
• Shares of Mylan jumped 8 percent after the generic drugmaker raised its outlook for the third quarter and year. The stock rose $3.73 to $50.23.
• Diamond Offshore Drilling lost 5 percent, the most in the S&P 500, as the slumping price of oil this week pushed down several oilfield service companies. Diamond Offshore fell $1.83 to $33.00.
• Salix Pharmaceuticals rose 1.2 percent. The company gained on news it is scrapping its merger with the subsidiary of an Italian drugmaker after the U.S. created new limits on the tax benefits of incorporating overseas. The stock rose $1.78 to $152.87.